Let the Production Function Be Q = AL^aK^b

question 77

Multiple Choice

Let the production function be q = AL^aK^b.The function exhibits increasing returns to scale if

• A) a + b = 1.
• B) a + b > 1.
• C) a + b < 1.
• D) Cannot be determined with the information given.

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Definitions:

Increasingly Larger

Describes a process or condition that grows or expands in size, volume, or quantity over time.

Distance

A measurement of the space between two points, often discussed in the context of physical space but also applicable in abstract senses.

Retinal Image

The image projected onto the retina, the light-sensitive tissue at the back of the eye, which allows one to see.

Approaching Object

An object that is moving closer to the observer, often studied in psychology and neuroscience to understand perception and reaction to stimuli.